What Is CTC, How To Answer Questions Related To It In An Interview

If you have been hunting for a job lately or are just new to the corporate world then you must have come across the term CTC a couple of times now. Finding it tricky to understand the difference between your CTC and hand salary? If yes, you have landed on the right page.

To begin with, CTC means Cost To Company. It is the total cost you as an employee of a company will incur. In basic terms, it is your total salary package and it includes many elements other than just your salary.

Your CTC can include funds the company will spend on the employee in different ways like health care, pension, housing allowance, travel or entertainment. So, with your salary, both the direct and indirect benefits given to you by the company are calculated in CTC.

CTC Calculation With Example

For instance, your gross salary as an employee is INR 50,000. Your direct benefits include a bonus of INR 10,000 and the company provides for a housing allowance of INR 5000, your CTC will be 50,000 + 5000 + 10000 = INR 65000/-

How To Calculate Your Salary From CTC?

When offered a package by the company, you might find it difficult to understand what is the basic salary you are being given by the organisation from the CTC. Usually, when you go for an interview, you are given the total package, which is your CTC.

Ask for the CTC breakdown by HR. You will find different components in the salary package offered to you. Look for the term, Basic Salary, and then the direct allowances given to you by the company. Calculate these together and you will have your in-hand salary or the salary you get at the end of every month.

If there are any deductions, for instance, professional tax or PF, subtract from the salary you calculate with the direct benefits and you will have the amount you will get in hand every month.

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How To Answer Questions Related To CTC In An Interview?

When you head out for a job interview (job interview tips), you will be asked about your expected CTC in your initial rounds only. When asked about your expectations, keep a few things in mind.

• Ask HR about the components of the CTC. CTC includes a lot of components other than the basic salary. Knowing what kind of allowances and deductibles the company is offering will help you figure out your expected CTC.

• Make sure you give HR a realistic CTC. Offering an unfavourable expectation can cut down your chances to get the job.
• Do research on the salary package offered to your job profile and calculate accordingly.
• After mentioning your expected CTC, make sure you make the company understand why you are demanding such a package. Talk about your skills, qualifications and experience to justify it.
• Be willing to negotiate with HR after sharing your expected CTC. Once you have their offer in hand, it will be better for you to bargain on your basic salary or allowances.

• Instead of giving an exact figure, give the team a CTC range. For instance, you can say that you are expecting a CTC package between INR 5 Lakh and 7 Lakh basis the industry average and are open to hearing the company's offer. Another way is letting the HR know that you are willing to negotiate depending on the benefits offered.

The basic reason why you are asked about your expected CTC is to know if you will be a suitable candidate for the company. (how to answer common interview questions)

If you quote too high, you might not fit into the company's budget. If you quote a salary that is less than their CTC, they might feel that you don't have enough experience for the job. So, make sure you don't go too high or too low with your expected CTC and quote just as per the industry standards.

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